Estrella International Energy Services Ltd.
TSX VENTURE : EEN

Estrella International Energy Services Ltd.

May 30, 2011 17:14 ET

Estrella International Energy Services Ltd. Announces First Quarter 2011 Financial Results and an Operational Update

BUENOS AIRES, ARGENTINA--(Marketwire - May 30, 2011) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

Estrella International Energy Services Ltd. ("Estrella" or the "Company") (TSX VENTURE:EEN) is pleased to announce that it has filed its interim unaudited financial statements for its first quarter ended March 31, 2011. The Corporation is also pleased to provide an update on the status of its current operations.

Copies of these documents can be found on the SEDAR website at www.sedar.com.

Financial Highlights for the three months ended March 31, 2011

(All dollar amounts are US$ '000)

  • the Company's revenues increased by 75% to a record of US$14,114

  • the Company recorded a net operating loss of ($1,752), partly driven by one time acquisition costs of Petroland and Zigma and startup costs for rigs in Bolivia and Colombia, and net loss of ($4,349) ($ -0.0430 per common share)

  • the Company completed a CDN$15,000 ($15,456) private placement of convertible debentures underwritten by Canaccord Genuity Corp. The proceeds raised were partially used to acquire 49% of Petroland S.A.S. and Zigma Colombia Petroleum Services S.A., as discussed more fully below.

Operational Update

Rig 1001, was deployed to Bolivia, and is under contract to commence operations for PlusPetrol Bolivia. The rig is on location and rigged up, but has not yet commenced operations due to delays in receiving a diesel use permit from the Bolivian government. The Company expects to receive the diesel use permit in early June 2011.

Rig 1201 has been mobilized to location in Tolhauca, Chile and is about to commencing drilling operations for GeoGlobal Energy LLC on another geothermal project in the Chilean Andes

The Company successfully negotiated an increased day rate under its contact with Sinopec for Rigs 101/102 located in southern Argentina. These increases are retroactive to March 1, 2011.

In Colombia, the Company's wholly owned subsidiary STS de los Andes was awarded a new contract by Ecopetrol for a 350 HP workover rig. STS6 is a 2006 built rig, refitted in 2011 that has been leased from a third party with an option to purchase. The rig is expected to enter operations with Ecopetrol in the coming weeks. The lease agreement for STS6 also provides an option to take delivery of a second 350 HP workover rig which was also built in 2006 and is currently in the final stages of refit.

Zigma Colombia Petroleum Services S.A., a company in which the Company holds a 49% interest has decided to sell two of their rigs. The rigs are the oldest rigs in the fleet, and do not fit into the company's long term operational plans. Proceeds from the sale of the rig will be used to reduce indebtedness of the company. Concurrently, rig Zigma4 is currently undergoing a series of modifications and upgrades, including the addition of a top drive and other automation. The rig will be re-launched as Rig 901 during the second quarter. Rig Zigma6 has completed its refit program and is currently being marketed for opportunities.

Petroland maintained six rigs working for Ecopetrol and the seventh is currently in maintenance before returning to work on a drilling program for a Colombian customer.

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects" and similar expressions. Forward-looking statements in this press release include, but are not limited to, statements with respect to the future business plans and services of Estrella.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Estrella. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and Estrella does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Estrella International Energy Services Ltd.
    Christian Bauwens
    Chief Financial Officer
    +54 (11) 5217-5250
    +54 (11) 5217-5280 (FAX)

    Estrella International Energy Services Ltd.
    Warren Levy
    Chairman & Chief Executive Officer
    +54 (11) 5217-5250
    +54 (11) 5217-5280 (FAX)
    info@estrellasp.com
    www.estrellasp.com